Thursday Morning Weakening Rupiah Awaiting Bank Indonesia's RDG

Illustration. (Photo: Bank Indonesia)

JAKARTA. Rupiah on the spot market opened in the red zone on trading Thursday, February 20 morning. According to VOI, at 09.07 WIB, the rupiah fell to a level of Rp. 13,715 per US dollar (US), or weakened 0.15 percent compared to the previous day's closing of Rp. 13,695 per US dollar.

Head of Research at Monex Investindo Futures, Ariston Tjendra, said market players on Thursday anticipated the possibility of cutting the benchmark interest rate of the Central Bank of China as a form of stimulus to regrow the economy amid the coronavirus outbreak.

"This stimulus was responded positively by market players and helped strengthen risk assets and possibly the rupiah today," he told VOI.

Besides waiting for the decision of the Central Bank of China, continued Ariston, the market is also waiting for the new policy of Bank Indonesia (BI) today. BI may conduct monetary easing to anticipate the impact of the corona virus.

"The rupiah has the potential to move in the range of IDR 13,650-13,720 today," he said.

The movement of the rupiah is equal to three currencies with the majority of currencies in the region. The Korean won was again the currency with the deepest weakness after falling 0.39 percent.

Followed, the Malaysian ringgit fell 0.23 percent. There was also the Taiwan dollar, which was corrected 0.12 percent. The Philippine peso and Thai baht also fell 0.06 percent and 0.04 percent, respectively.

The Singapore dollar and Hong Kong dollar were also slightly corrected by 0.01 percent. Meanwhile, the Japanese yen was the biggest strengthening currency against the US dollar after gaining 0.17 percent.

The movement of the rupiah today awaits the results of the Board of Governors (RDG) Meeting of Bank Indonesia (BI). Analysts predict that BI will cut the benchmark interest rate or the BI 7-Day Reserve Repo Rate (BI7-DRRR). Currently the BI7-DRRR is at the 5 percent level.